Labor Market Discrimination and Sorting: Evidence from South Africa

42 Pages Posted: 7 Sep 2017 Last revised: 21 Dec 2017

Date Written: September 6, 2017

Abstract

This paper collects a unique data set of classified ads and exploits quasi-random variation in the applicant pool composition to test for hiring discrimination against immigrants in South Africa's informal sector. Consistent with a tournament models in which immigrants are penalized, the analysis finds that foreigners and natives benefit from being pooled with foreign job seekers. Next, the paper tests whether discrimination affects search behavior. Controlling for location fixed effects, the analysis finds suggestive evidence for sorting: immigrants search further away and higher discrimination in the residential area is positively correlated with the decision to search in different suburbs.

Suggested Citation

Abel, Martin, Labor Market Discrimination and Sorting: Evidence from South Africa (September 6, 2017). World Bank Policy Research Working Paper No. 8180, Available at SSRN: https://ssrn.com/abstract=3033330

Martin Abel (Contact Author)

Harvard University ( email )

1875 Cambridge Street
Cambridge, MA 02138
United States

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